Pennsylvania Liquor Control Board reports record $128M in profits

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HARRISBURG — The Pennsylvania Liquor Control Board on Monday reported record revenue and profit, which one analyst says will bolster arguments of state lawmakers leery of privatization.

“I'm not so sure it impacts large numbers of the general public, but it provides additional ammunition to members of the General Assembly skeptical of privatization,” said Tom Baldino, a political science professor at Wilkes University in Wilkes-Barre who closely follows the Legislature.

Stephen Miskin, spokesman for House Majority Leader Mike Turzai, R-Bradford Woods, a leading privatization proponent, said “in an open, honest debate” the new numbers should not affect lawmakers' positions.

“A privatized industry would bring in more revenue and create more jobs for Pennsylvanians and allow the PLCB agency itself to actually enforce the regulation, and increase education, which is what its function should be,” Miskin said.

Revenue from liquor and wine sales reached almost $2.2 billion in the 2012-13 fiscal year, a 4.5 percent increase, the agency said. That follows record sales and net income in the 2011-12 year. Board members declined to comment.

Sales growth and controlled expenses resulted in profit of $128.4 million, an increase of $24.9 million, or 24 percent, over the previous year. About $80 million of the total went to the state's General Fund. Combined with revenue from liquor and sales taxes, $512 million went to the state.

Growth in retail wine sales — a 6 percent increase — drove the numbers. That was attributed in large part to “Chairman's Selection,” fine wines the agency recommended and made available at discounted prices. Retail spirits sales increased 3.7 percent. Overall sales to licensees such as hotels and bars increased 1.7 percent.

Turzai and Republican Gov. Tom Corbett made an unsuccessful push for privatization this spring. Pennsylvania and Utah are the only states controlling both the wholesale and retail sale of wine and liquor.

The House approved a privatization bill. The Senate approved an amendment — but not a final bill — to allow more private sales and phase out the state stores.

Getting the state out of the liquor business remains a priority for the governor, a spokesman said. The governor's plan, which did not win House approval, would have generated “just as much revenue, on top of providing an additional $1 billion” for block grants to public schools, said Eric Shirk, a Corbett spokesman.

“The plan would also provide Pennsylvania consumers with the choice and convenience that they clearly want and deserve,” Shirk said.

House Minority Leader Frank Dermody, D-Oakmont, said the numbers show “wine and spirits stores are a resounding success story for Pennsylvania taxpayers.”

“The state employees who made this happen should be congratulated,” Dermody said. ”With more freedom to modernize the system of wine and liquor sales, they could increase profits even more while maintaining protections against illegal sales.”

Sen. Jim Ferlo of Highland Park, ranking Democrat on the Senate panel that considered privatization, said the LCB's announcement “reinforces the success and staying power of our existing liquor sales structure.”

But Katrina Anderson, director of government operations for the Commonwealth Foundation, a privatization supporter, said, “It certainly isn't impressive for them to brag about record revenues when they are a government monopoly.”

The LCB contends it always has made a profit.

“It's just more confirmation for those who viewed the state stores as a state asset,” said Christopher Borick, a political science professor at Muhlenberg College in Allentown. “For those ideologically opposed, it wouldn't affect their point of view anyway. So I don't think it will shake up the debate in a significant manner.”

Brad Bumsted is state Capitol reporter for the Tribune-Review. He can be reached at 717-787-1405 and bbumsted@tribweb.com.

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